entertainment

This chart shows trailing 4 quarter profits for Microsoft’s Entertainment & Devices group, which includes smartphones and the Xbox. (Using T4 smooths the profit spikes that happen every holiday season, which is the second quarter of Microsoft’s fiscal year.)

After years of losses, the E&D group was consistently in the black. In the 2010 holiday season (Q2’11) Microsoft introduced Kinect, driving profits even higher.

But a year later, Microsoft began paying Nokia $250 million every quarter for carrying Windows Phone 8. In exchange, Nokia pays Microsoft a license fee (estimated at under $20) for every Windows Phone it sells. (The arrangement between the two has other elements as well, like technology sharing.)

Unfortunately, Nokia’s flagship Windows Phone, the Lumia 900, is selling poorly. So poorly, in fact, that the company just cut its price in half.

So Nokia helped send the E&D back into the red — it’s lost more than $200 million in each of the last two quarters. If Windows Phone sales don’t pick up, E&D will turn into a consistent money loser again.

We know Samsung’s been ramping up its home entertainment arsenal. Now, recent intel acquired by the folks at SmartHouse suggests that the Korean outfit’s about to dive into deeper waters, after reportedly striking a deal in Australia. The pact, that’s yet to become official, would give the manufacturer access to the plethora of films available from your favorite blue-and-yellow video store, which could then be streamed to your beloved Galaxy handset or Tab, as well as Sammy-branded Smart TVs, Blu-ray players and laptops. Furthermore, the report claims Samsung’s got a friendly billing system in the works that’d allow easy access to the content on your devices. It’s expected to hit US and Euro shores “as early as September.” Until then you’ll have to stick with the good ol’ Redbox kiosks.

Charleston, South Carolina might be famous for the eponymous knee / hand dance, but this week sees it become the second location in the US to get Comcast’s MyTV Choice. Rather than buying all the channels, or paying á la carte for just the ones you watch, you pick a platform and then bolt on a package of channels, grouped by theme — you get “Entertainment & Lifestyle,” “Movies,” “Kids” or “News & Info.” These smaller, cheaper bundles are in response to being forced to carry channels owned by the same group, if you’re paying for MTV, you’re also paying for TV Land, for example. Still, those in the city (when not dancing their knee joints away) should be interested to know that the Get Started platform costs $25, Get Started Plus $45 and each additional package is $10.

Traditionally, only the mammoth Hollywood studios could afford to work with 3D—it’s too expensive to build the necessary, air-conditioned 24 hours a day, server farms. The company behind Despicable Me decided to try something new, and cut the AC.

Illumination Entertainment, the company behind Despicable Me, decided to try something new. Instead of using air-conditioned server farms to render images, the company asked IBM to built a customized server farm using the iDataPlex system, a processing system that cuts down on energy use by 40% compared to traditional server farms.

The iDataPlex has two key advantages: a flexible configuration that doubles the amount of systems that can run in a single IBM rack and the ability to run an ambient temperature room (no costly air-conditioning required). The system has been on the market for over a year, but Illumination is the first studio to use it for animated film.

This doesn’t mean that any scrappy studio with a dream can now produce a high-end 3-D animated film. Illumination used a 330-person team of artists, producers, and support staff to produce 142 terabytes of data. And the rendering farm, which processed up to 500,000 frames per week, was built in conjunction with Mac Guff Ligne, a French digital production studio.

But the iDataPlex gives Illumination a leg up in the graphics rendering process. Illumination Entertainment’s server farm, for example, is the size of four parking spots. That’s half the amount of space the company initially allotted to the farm. “Oftentimes a small studio like Illumination really wants to put their energy behind creating as compelling of content as possible,” explains Steve Canepa, Vice President, Media & Entertainment Industry at IBM. “By minimizing the technological issues associated with building and managing the [rendering] environment, we allow studios to reduce the amount of time, energy, and resources necessary to create an underlying technological platform.”

It’s a compelling idea for studios—even major ones—that want to cut costs and look environmentally conscious at the same time. IBM is already working with a number of other studios to implement similar solutions. Canepa concedes that studios could build similar systems by purchasing off-the-shelf racks and processors, but the iDataPlex’s unique configuration of servers packs a lot of processing power into a small space—and that’s not easy to replicate. Don’t expect these rigs to be appearing in suburban garages anytime soon.

Fast Company empowers innovators to challenge convention and create the future of business.

Blockbuster? We knew it was dying, courtesy Redbox, Netflix and the changing ways people consume their entertainment, but when will it finally expire? Probably next year, according to one analyst and the company’s own balance sheet. Updated.

While the remaining 6,000 stores is nothing to sneeze at (my late hometown one not amongst them), there is precedence for massive, simultaneous closures in rival Movie Gallery. That company had 2,400 stores, you see, and it shuttered them all back in February.

Ending on a positive note, the company could have a Redbox/Netflix hybrid future with its existing supermarket kiosks and mail service. So here’s hoping that happens, some people can keep their jobs, and Blockbuster’s predicted “demise” in 2011 is merely a metamorphosis into something a bit leaner and meaner. Competition is good, and all that.

Update: Reader Josh writes in with an additional bit of depressing news for Blockbuster:

[W]hen considering the future of Blockbuster kiosks, Blockbuster doesn’t actually own any of kiosks. NCR owns and operates all of them. Blockbuster just gets a small licensing royalty for them. So, Blockbuster definitely doesn’t have a chance at sustaining itself on those kiosks.

It’s still very, very early in the world of iPad-specific apps, with less than 2,500 of them in the store compared to 150,000+ iPhone apps. But so far? It’s totally dominated by games.

App store analysts Distimo did a rundown of what you’ll find in the iPad app store, and a full third of them are games. The next closest category is “entertainment,” which clocks in at 11%, followed by “education” at 8.6%.

That seems like a whole lot of game playing and being entertained, but that proportion is even more heavy for iPhone apps, where a full 70% of apps fall into those two categories.

But with devs just getting the actual hardware into their hands a few days ago, we’re clearly just seeing the very beginning of the iPad apps craze. And depending on how people decide the want to use this thing, we could see even more games pop up or we could see the store balanced out with more content-based or productivity apps. But really, the smart money is on games, games, games. [Distimo via TechCrunch]

Take a home video like this one (posted January 24, 2007) – 1.1 million views

make it more extreme like this (posted August 03, 2009) – 2.7 million views

Promote the heck out of it through paid media and traditional PR support (i.e. seed it to every gullible news outlet) and let them put it on the news (for free). And be sure to cover your tracks by turning off “statistics and data” on the YouTube video so people can’t back track where you promoted the video.

Unfortunately for Microsoft, no one will ever know if this viral video drove any sales like the JKWeddingDance one did for Chris Brown’s single “Forever” which hit the top of the sales charts on iTunes and Amazon MP3 the same week.

Digital Consigliere

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.